Solvency Funding Relief Regulations (SOR/2006-275)

Regulations are current to 2014-09-29 and last amended on 2011-04-01. Previous Versions

Documents and Information To Be Filed with Superintendent

  •  (1) The administrator shall file the following documents and information with the Superintendent for the first plan year of funding of the initial solvency deficiency:

    • (a) written notification that the initial solvency deficiency is to be funded in accordance with this Part;

    • (b) the actuarial report valuing the plan as of the day on which the initial solvency deficiency emerged;

    • (c) a written statement confirming that a resolution of the board of directors of the employer has been passed, if the employer is a corporation, or, if the employer is not a corporation, an approval of the persons who have the authority to direct or authorize the actions of that body, has been given, authorizing the special payment schedule calculated in accordance with this Part;

    • (d) a copy of each letter of credit in effect for the plan year;

    • (e) a written statement from the administrator that the letters of credit comply with this Part; and

    • (f) a copy of the trust agreement set out in section 23 together with the name and address of the holder of the letters of credit.

  • (2) For each subsequent plan year of funding, the administrator shall file with the Superintendent copies of all subsequent letters of credit that have been obtained by the employer and a written statement, for each letter of credit filed, that it complies with this Part.

Statement to Members

 When the administrator provides the written statement under paragraph 28(1)(b) of the Act, the administrator shall also provide the following information:

  • (a) the amount of the initial solvency deficiency;

  • (b) the fact that the deficiency is to be funded in accordance with this Part by equal annual payments over a period not exceeding 10 years; and

  • (c) the aggregate face amount of all of the letters of credit that are held by the holder in respect of the plan.

Reduction of the Face Amount of a Letter of Credit

  •  (1) The face amount of a letter of credit may be reduced, effective the beginning of a plan year, by

    • (a) the amount by which the aggregate amount of payments that the employer has made to the pension fund in the previous plan year exceeds the total of the required special payments and the normal cost of the plan for that year as shown in an actuarial report; or

    • (b) the amount by which the aggregate face amount of all of the letters of credit that are held by the holder in respect of the plan exceeds the amount set out in paragraph 19(2)(a) or (b), as the case may be.

  • (2) The face amount of the letter of credit shall not be reduced following a default.

  • SOR/2011-85, s. 20.

New Solvency Deficiency

  •  (1) Despite section 9 of the Pension Benefits Standards Regulations, 1985, a solvency deficiency that emerges after the day on which the initial solvency deficiency emerged shall be calculated as the amount by which the solvency liabilities exceed the sum of the following amounts:

    • (a) the adjusted solvency asset amount,

    • (b) the present value of special payments made under section 19 if at least one of those payments is due more than five years after the valuation date, and

    • (c) the present value of the going concern special payments that were used to fund the initial solvency deficiency that are due during the period beginning on the valuation date and ending on the 10th anniversary of the date of emergence of the initial solvency deficiency if at least one of those payments is due more than five years after the valuation date.

  • (2) The interest rate used to determine the present value of the special payments referred to in subsection (1) is the same as the interest rate used to determine the solvency liabilities.

  • SOR/2010-149, s. 14.